Archive for July, 2011

The government has choice to make with its REO. Based on past choices we have seen coming out of Washington, I suspect they will make the wrong choice, but with so much pressure to do the wrong thing, making the right choice is nearly impossible for most politicians.Special_Home_Investment_Trust

Government Weighs Turning Foreclosures Into Rentals

By Nick Timiraos -- July 22, 2011, 11:28 AM ET
There’s an 800-pound gorilla in the nation’s hardest-hit housing markets: hundreds of thousands of foreclosed properties are selling, and there’s four times as many potential foreclosures behind them. The Journal writes today that one idea gaining support in Washington is an effort to pull some of those properties off the market and rent them out, either on homes owned by federal agencies or loan giants Fannie Mae and Freddie Mac.
Ordinarily, I would be appalled by this idea. Keeping houses off[READ MORE]

Back in early June, the story broke about how OC realtors seek to silence free speech by accusing IrvineRenter of lying. It set in motion a chain of events which ended in OCAr's dismissing the accusations last week.Irvine_Rambo

Events that shape your life

Certain events and experiences in life can greatly alter your thinking, your actions, and your destiny. When I was in my first year of junior high, I used to walk over with my friends to a nearby restaurant in the morning before school. One day, a punk two years older than me sent a message that he was going to punch me out when I stepped out the door. His little clique was eagerly standing with him outside waiting for me to leave. I had a decision to make. It would be a decision that impacted my life for years thereafter.[READ MORE]

The Real Land Barons of Orange County

For those of you uninterested in statistics and heady analysis of housing markets, the rest of this post is a profile of the crumbling property empire of OC Housewife Vicki Gunvalson and her X (or soon to be) husband Donn. The property records show Donn and Victoria Gunvalson owning three properties:Ponzi_wine

7 SHIRE Coto de Caza, CA 92679 2 Altimira, Coto de Caza, CA 92679 25 Vermillion, Irvine, CA 92603 There is one thing we can be certain of based on the analysis presented above by Global Decision and IHB, the value of the Gunvalson property empire is going down.

2 Altimira, Coto de Caza, CA 92679

This is a property I find personally appealing. It's a big property adjacent to the golf practice facility. Hopefully, it's not so close that golf balls pelt the place. According[READ MORE]

Soylent Green Is People's take on the falling conforming limit

Will the 2011 Real Estate market hit a tipping point with the reduction in loan limits, or are we seeing much made out of nothing? It’s a bit of both I’d say.housing-bubble-clearance-sale

Numbers don’t lie.

Let’s assume that current spreads between Portfolio Jumbo financing and Standard Conforming mortgage rates runs a half percentage point. For a $729,750 mortgage, that translates into an increase of $219.92 per month. Some might say that’s an acceptable change in terms. Others will have this increase weigh heavily on their commitment to buying. Quantify this expense not as a mortgage payment, but food, entertaining, air conditioning, gasoline. $219.92 is real money to most prudent buyers when viewed in context. During the hyper bubble period payments rose primarily because of price inflation, not higher rates. The market counteracted this trend with[READ MORE]

Over the last two posts on the Irvine Housing Market, we have looked at aggregate totals for Irvine and at individual neighborhoods. The nitty-gritty is in the details. What features in homes do buyers value in the market? Today we take a careful look at the devil in the details.

A presentation by Jaysen Gillespie of Global Decision Global Decision is an analytics consulting firm.  While our methods are not industry-specific, our engagements are skewed towards specific industries in Southern California, such as real estate (along with online gaming and restaurant chains).  We specialize in applying both foundational and advanced analytics to better understand business and economic issues. Today’s post is part three of our series on hedonic housing valuation in Irvine.  The goal of a hedonic housing valuation model is to use all information about a sale, including both[READ MORE]

Has fairness been a casualty of the housing bubble? At times it looks that way. The government keeps implementing policies to benefit one group over another not because it is the right thing to do but because it buys them votes. Last year, I wrote about The Policy of Screwing Prudent Renters to Benefit Loan Owners.bank_axis_evil

One housing bubble phenomenon was that the right ones -- prudent people who knew what they could afford -- were kept out, and the wrong ones -- kool aid intoxicated fools -- were let in. That mistake was bad enough, but now our own government is frantically working to repeat this mistake. Rather than doing something corrective, like letting house prices fall, our government is going to extreme lengths to keep the right ones out and keep the wrong ones in.
Since the previous failed policies of screwing renters did not succeed, the Obama[READ MORE]

The fear of strategic default is a necessary deterrent to foolish lending. Without it, lenders are emboldened to make all manner of bad loans because they believe they will get paid back. Lenders will make nearly any loan if they believe they will get their money back with interest. It's only when they feel they won't get repaid are they prompted to loan responsibly.loan_owner

Signatory versus asset-backed debt

Some have questioned how I can be so against debt, yet I am leveraging up to the max to buy cashflow properties in Las Vegas. Isn't that being hypocritical? No. Not all debt is created equal. The debt I am taking on is backed by a cashflow-producing asset. The income stream is being used to repay the debt with interest, and if for some reason I am unwilling to pay back the loan, the lender can[READ MORE]

Which Irvine Village is the most desirable for single family homes?

Which Irvine Village is the best, and how could this be determined? Well, taking an opinion poll might be interesting, but it wouldn't be backed by anything substantial. To determine what people really believe about desirability, we have to look where people put their money. Money talks. The neighborhoods where people pay the most for real estate determines what is "best." Determining which neighborhood obtains the highest premiums is not easy. We couldn't simple look to the MLS or to past sales and see where the prices are highest because there can be many reasons people pay more in one neighborhood versus another. To accurately measure premium, we needed to normalize for other factors to distill a premium value not explainable by other factors. In the first post in this series, [READ MORE]

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